South Korea casino Kangwon Land managed to boost revenue despite a sharp decrease in tourism following an infectious disease outbreak.
Kangwon Land, the only one of South Korea’s 17 casinos that allows local residents to gamble, reported revenue up 9.3% year-on-year to KRW 389b (US $328.2m) in the three months ending June 30. All but KRW 10.2b of the property’s revenue came from gaming. Operating profit rose 19.7% to KRW 148b but net profit fell 3.2% to KRW 97.4b ($82.2m).
Profits were undone by KRW 23b in non-operating costs, a nearly tenfold increase year-on-year. Slightly less than half this sum came via additional tax costs following a tax probe at the end of last year, the result of which the company has appealed.
Apart from these one-offs, casino metrics were solid, with casino visits up 4% year-on-year to 723k, the third straight quarter of increased traffic. Table drop was up 7.3%, drop per customer rose 3.2% and hold rate improved 0.2 points to 23.2%. All gaming segments posted gains, with slots up 13.8%, VIP gaming up 13.5% and mass market tables up 3%.
South Korean casinos were negatively impacted by the outbreak earlier this year of Middle East Respiratory Syndrome (MERS), which pushed tourist arrivals down 41% in June. The other 16 casinos, which rely exclusively on foreigners and Koreans holding international passports, were hit hard. Paradise Co Ltd reported profit down 47.1% in Q2 while Grand Korea Leisure posted year-on-year gains but a 42.4% sequential decline.
However, it should be noted that Kangwon Land’s Q2 benefited from comparison with the same period last year, which saw several conventions and tour groups cancel bookings following the Sewol ferry disaster.
